a href="/myfiles/Images/2013/02/06/ki04.jpg" title="People shop at a supermarket in Riyadh during a recent “mega sale". Unwise consumer habits are the reason for many Saudi families falling into the debt trap, economic experts say. — SG file photo" People shop at a supermarket in Riyadh during a recent “mega sale". Unwise consumer habits are the reason for many Saudi families falling into the debt trap, economic experts say. — SG file photo Joud Al-Amri Saudi Gazette JEDDAH — Unable to live within their means, Saudi families are racking up debt at alarming rates. With little to no savings or disposable income, experts say Saudis must come to terms with their spending habits, something which will require a change in lifestyles and deeper understanding of the risks involved with overspending. Saudis are strong believers in the Arabic adage “Spend what is in your pocket and you will get more from the unknown” and while this may have been an acceptable way to live in the past, the sheer number of citizens suffering from unpaid loans and debt is ample proof that Saudi society needs a paradigm shift in its spending habits. Citizen Khaled Al-Harthi's situation is one many can relate to. Newly-married and working for the government, Al-Harthi says his SR8,000 salary finishes before the middle of the month due to loans and other bills. “I am 28 years old and securely employed in a government job. My SR8,000 salary is very good considering my age and that I'm only beginning my career. Yet, nothing remains of it because I have dozens of bills and loans to pay. Things have gotten so bad that I have to borrow to run the house,” he said. Dr. Samer Arrar, a consultant psychiatrist, said in order to achieve financial security, parents need to take the first step by setting certain limits and curbing the spending habits of their children. By setting a good example and encouraging responsible spending habits, children will learn to live within their means. “If parents set a good example and lead, children will follow. This starts by drawing up a household budget in which necessities are listed first, followed by other needs and lastly luxuries. Things like creating a family budget and setting a weekly allowance for children, teach kids to be financially responsible and control their desires. When a child learns how to control his spending behavior, this will reflect in his life as he will learn how to save and make the most of his income. All of this can only be achieved with the participation of the family,” he said. “Families that do not budget and learn how to spend correctly may produce a generation that cannot shoulder its responsibility. A generation that is greedy and follows it desires at any costs may have to resort to illicit methods in order to get money,” he added. Dr. Osama Filali, professor of economics at Jeddah's King Abdulaziz University, said the culture of financial planning is nonexistent in Saudi society, which he described as a consumer society in which the concepts of saving and investing are very weak. For things to change, Dr. Filali said people must abandon age-old customs and traditions that promote irresponsible spending habits. “The majority of people in Saudi society do not know how to budget for the whole month with the salary they make. While people in Western societies draw up detailed spending plans, we continue to abide by customs and traditions that are simply incompatible with the modern world we live in. When a person resorts to borrowing or taking loans from friends and well-off relatives, his conduct is similar to begging,” he said. “The consumption tendency of the state is very high due to the cost of imported consumer commodities, which only means that expenditure is also high. What covers this is that oil, petrochemicals and refined petroleum exports are in favor of the balance of payments. However, this may not always be the case.”
